John Kosner and Ed Desser Appeared on the Sports Media Watch Podcast
Original Article: Sports Media Watch Podcast by Jon Lewis and Drew Lerner, December 27th, 2023
On today's episode, Jon and Drew are joined by industry veterans John Kosner and Ed Desser for a big picture look at sports media. John Kosner previously served as the NBA's VP of Broadcasting during the Dream Team era and most recently served as ESPN's Executive Vice President and General Manager, Digital and Print Media before beginning his consultancy firm Kosner Media. Ed Desser served as a senior executive in the NBA's Commissioner's Office and as President of NBA Television where he negotiated numerous media rights deals for the league and has run his consultancy Desser Sports Media since 2005. The crew covers the NBA's upcoming media rights negotiations, the state of linear television and the transition to digital, fragmentation in the industry, Disney's trial balloon for divesting ABC, and possible strategic partners at ESPN.
From the latest Sports Media Watch Podcast, industry veterans John Kosner and Ed Desser join Jon Lewis and Drew Lerner to discuss the upcoming NBA media rights negotiations, the future of Disney, and more.
John Kosner on the upcoming NBA deals
People keep realizing just the intrinsic value of sports. And from the early ’80s until today, that value has only increased. Just stepping away from the NBA for a second, sports — you have to watch it live, it’s content that’s not replicable. As a matter of fact, we would argue it’s the only content that unifies people. People watch habitually. Sports is evergreen and yet it’s different every year.
When you take an asset like the NBA, in the current environment where there’s almost unlimited video options for people — some of them are paid some of them are free — it’s a differentiated product. As everything moves to streaming, as things move to direct-to-consumer, individual months matter in a way that they didn’t, say, earlier in my career … Now when all of the sudden almost all of these programmers are in the month-to-month churn business, a six month NBA regular season is just a bigger asset than people might have thought in the past world. It’s a reason to subscribe, it’s a reason not to churn.
Ed Desser on expectations for the amount of NBA media partners
I’m not sure that it matters. Whether somebody has two partners or four partners doesn’t change the character of their product. It’s probably the case that more partners, given what’s going on economically, will be appropriate and necessary. There’s no question in my mind that the NBA’s value as a programming packager has materially increased. That gets reflected in the deals both in terms of the amount for each and the number of them. I think there is room. I mean if we look at the historical approach of the NBA, it has been to have fewer partners. You’d have to go back to before 1984 to a time when both USA and ESPN and CBS all had rights.
It just may not be that that works anymore in a more constrained environment where the various entertainment companies that have traditionally bought rights aren’t as flush and aren’t growing the same way. And at the same time you’ve got the tech companies that are looking for how best to move forward.
Kosner on how to combat decline of linear television
Last month in the SBJ, SSRS Research Group had a piece and they said that today 2/3rds of the U.S. has a paid television subscription at home. That’s down from 75% five years ago and 85% a decade ago. And the key point they made is that access for young kids to live sports in the home is much diminished. Ed and I have spent a lot of time talking about FAST channels because FAST channels represent — almost everybody has a device in their home, almost everybody has a sufficiently fast connection to see video on a device — and it could be that utilizing FAST channels in the future is going to be one way that sports can get visibility to kids. And if you don’t build that fan base in an environment where kids are growing up with unlimited supply of video, video games, any number of other things, you’re playing with fire if you’re running a sports enterprise.
Desser on potential strategic partners for ESPN
I think that you have to ask yourself, “what is it that ESPN needs that it doesn’t already have?” It has relationships for programming, it has excellent relationships on the programming side. It has excellent relationships on the advertising side. It is well positioned with its app and its website on the digital side, to an extent. But obviously there are a lot more digital parties that could have an association.
The challenge is also, beyond the investment, it’s who is not going to be a problematic partner for Disney and ESPN. We saw ESPN finally getting into betting recently and that was something they had resisted doing for quite a long time. Is this something that is consistent with the Disney brand, for example. Are we going to make an association with PENN and is it going to cost us relationship with DraftKings and others? Finding the sweet spot of somebody who is motivated enough to want to come in, bring something more than just money, because obviously ESPN could do something with private equity or something like that, but that doesn’t make ESPN better necessarily.
So you’re talking about on the one hand, a large number of potential parties, but not very many I suspect that check enough boxes that it’s gonna make sense to do. Now having said that, there are a lot of entities out there that would have an interest in what ESPN is and has achieved. And so I can see it happening, it’s just hard to know … it’s a broad list of possibilities and it’s hard to anticipate exactly who the party or parties would be.
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